A review of challenges and opportunities in China’s styrene butadiene rubber (SBR) market

27 July 2016

The domestic SBR market suffered from aggravated oversupply in the previous year. As the largest derivative of SBR, the downstream tyre industry was bearish with prices plunging in the year because the domestic vehicle market development confronted with the bottleneck and the US and other countries took a series of protectionist policies.

In addition, the weak crude oil and macro-economy, as well as the sluggish NR market, cast a cloud on the SBR market.

A review of challenges and opportunities in China’s styrene butadiene rubber (SBR) marke

Thus, domestic SBR prices moved down and hit new lows since late December 2008. The price range narrowed further, especially in the second half of 2015. For example, the prices of non-oil grade SBR 1502 in east China were in the range of CNY8,550-10,900/tonne EXWH in the year, with the gap between the high and the low end not higher than CNY2,350/tonne.

Amid the bearish market sentiment, participants along the SBR industry chain were more cautious in operation. Producers cut operating rates in view of negative profits. Few traders stockpiled large-volume cargoes. The low run rates and traders’ low inventories, together with rising values of feedstock BD, pushed up the SBR prices during some periods, but the price rises were short-lived and small as a result of weak support from the major downstream tyre industry.

China’s apparent demand for SBR was expected to be 1.32m tonnes in 2015, down by 0.9% from 1.34m tonnes in 2014. Uncommonly, the downstream tyre market experienced a negative growth in 2015, and the vehicle market was also in trouble. Following de-stocking early in the year, domestic tyre producers suffered mounting inventories in 2015, because the US’ anti-dumping and anti-subsidy measures greatly dampened China’s tyre exports.

  • With such a market change in 2015, what are we observing this year and what can we expect for 2017?
  • What are the supply and demand forecast and specific drivers for the second half of the year and in 2017?
  • What is the proportion of output between SSBR and ESBR?
  • What is the domestic market outlook which has a major influence on import market demand and prices?
  • How are the domestic producers’ margins performing and their production outlook for H2 2016 – 2017?
  • How is each demand segment performing and its corresponding SBR/PBR consumption outlook for H2 2016 - 2017?
  • What are the seasonal trends for each downstream demand segment?
  • Which is the optimal downstream segment to target and sales timing that can support better sale prices?

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China Rubber Annual Studies

The ICIS China SBR and PBR Annual Studies provide exclusive insights into the country’s rapidly evolving rubber markets by providing an in-depth supply and demand review and outlook for Chinese rubber. Invest in the China Annual Studies to make better-informed commercial and business decisions, as well as robust risk strategies.

Each study provides you with valuable data and intelligence on:

  • A comprehensive review of China’s SBR and PBR market in 2016
  • Analyses of current supply/demand, with a one-year forecast
  • Pricing data and margins, as well as the drivers
  • Commentary on the long-term impact of China’s rubber markets on international players
  • Insights into the driving factors for 2017 – feedstock, imports/exports and so much more

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